A peptidase (GICP) that cleaves the Gln-Ile bond of a peptide Gly-Ile-Asp-Val-Gln-Ile-Tyr(T-1), a sequence in phenylalanine oxidase, was purified from bovine pancreas. The purified enzyme had an Mr of approximately 29,000, as determined by SDS-PAGE, and its N-terminal sequence was identical to that of bovine pancreatic elastase II. The enzyme released Gly-Ile-Asp-Val-Gln and Ile-Tyr from T-1 (Km = 8.3 microM k(cat) = 2.1 s(-1)) and the catalytic efficiency (2.6 X 10(5) M(-1)s(-1)) was comparable to those of elastase II from porcine pancreas and rat mesenteric arterial bed perfusate. The P1 site specificity of GICP toward oxidized insulin A and B chains suggested that major cleavage sites were the peptide bond at the C-terminal side of Gln, Leu, His, and Tyr residues.